The city will pay for all current expenditures with current revenues. The city will avoid budgetary procedures that balance current expenditures at the expense of meeting future years' expenses, such as postponing expenditures, accruing future years' revenues, or rolling over short-term debt.

The budget will provide for adequate maintenance of public facilities and equipment and for their orderly replacement.

The budget will provide for adequate funding of all retirement systems.

The city will maintain a control system to help adhere to the budget.

The City Administration will prepare regular reports comparing actual revenues and expenditures to budgeted amounts.

The city will integrate performance measurement and productivity indicators with the budget.

Annual budget increases in all government funds shall be consistent with increase growth in the tax base, government aids and credits and other local non-property tax revenue.

In addition to the above policies, procedures and requirements set forth in Section 8 of the Home Rule Charter shall be followed in preparing and using the annual operating budget. The shifting of budgeted funds from 1 object code to another within the departmental budget is permitted. This shifting shall be approved by the Mayor and shall only include non-capital outlay items. All other shifts from 1) 1 department to another department budget; 2) from 1 fund budget to another; and 3) shifting of fund for the purchase of capital outlay and all unbudgeted expenditures shall be approved by the City Council.

Programs will be used to give greater detail in the budgeting process. Programs are designed to account for a greater level of detail than will be found in the normal department/object breakdown. Programs within a department are summarized to make up the department total. Programs do not replace the department level but supplement the department level. The use of programs is particularly helpful for construction funds or large departments, where a further breakdown of department expenses is desirable.

Periodically, the City Council may review a particular department/program budget(s) in great detail. This review may include a justification of all expenditures for each program as well as revenues generated by each program.

A contingency account will be maintained in the annual operating budget to provide for unanticipated expenditures of a nonrecurring nature or to meet unexpected small increases in service delivery costs. Transfers from contingency account to the operating budget programs will require approval by the City Council.

The Finance Department will publish the proposed budget summary report in accordance with Home Rule Charter and state law.

The city will make all capital improvements in accordance with a Capital Improvement Program approved by the City Council and in accordance the city's debt policy. Projects using property tax revenue shall be limited to revenue available for each year of the program. The Finance Department shall project property tax revenue available (including local government aids) for the Capital Improvement Program based on the city financial policy on debt. The projection shall be reviewed annually.

The City Administration will develop a 6-year plan for capital improvements including financing and update it annually. At the time improvements are being implemented, projected operating budgets will also be developed.

The Capital Improvements Program will be coordinated with the annual Operating Budget in accordance with the implementation schedule identified in the capital program.

The city will use intergovernmental revenue to finance only those capital improvements that are consistent with the Capital Improvement Program and city priorities.

The city will maintain all its assets at a level adequate to protect its investments and to minimize future maintenance and replacement cost.

The city Administration will develop a city equipment purchase and replacement schedule will be projected for at least 2 years. This schedule will be updated annually.

The administration will identify the estimated cost and potential funding sources for each capital project proposal before it is submitted to the council for approval.

The administration shall advise the council of the least costly method of financing proposed capital projects.

The city will confine long-term (7 years or more) borrowing to capital improvements.

When debt is incurred to finance improvements or equipment, it will be repaid within a period not to exceed the useful life of the project.

The city will keep the maturity of all debt at or below 20 years.

Where possible, the city will use self-supporting bonds instead of general obligation bonds.

The city will not use long-term-debt for current operations.

Short-term debt (less than 7 years) will only be used for these functions: lease purchases, purchase of equipment, or interim financing to be used in periods of excessively high interest rates. In the case of interim financing, payments may include some principal reduction but need not be amortized in less than 7 years. Interim financing will be refinanced as permanent financing as soon as market conditions make this possible.

The city will strive to reestablish its "A-1" rating and strive to achieve and maintain an "AA" credit rating from Moody's. This will include good communication with the agencies.

Fiscal Review Committee. The city encourages counties, ISD 742, St. Cloud H.R.A, and other private enterprise stake holders to participate in a Fiscal Review Committee to review the fiscal impact of local overlapping debt and other fiscal issues.

Net Tax Supported Debt The net tax supported debt is the gross debt less revenue bonds, tax increment bonds, state aid bond, special assessments receivable, and cash on hand in debt funds. Long-term leases that are supported by tax levies and are at least 7 years in duration are included in the gross debt amount. This indicator attempts to directly and most accurately measure the true burden on the city's property tax base.

The total budgeted debt service for net tax supported debt will not exceed 12% of the sum of the annual tax levy and government aids paid by the State of Minnesota in the same budget year. However, the city has targeted 11.5% as a preferred level of debt service.

Total net tax supported debt will not exceed 1.15% of the estimated full value of the city with a goal of not to exceed 1.1%.

Public Improvements - Projects which use TIF in lieu of other city financing. The principal purposes for creating the district or to make public improvements for redevelopment of old deteriorated public facilities, extension of major roads, trunk utilities lines into developing areas of the city, and purchase land for industrial development. The total outstanding public tax increment debt shall not exceed 1.7% of the estimated full value of the city.

Economic Development (Private) - The primary purpose of this type of project is redevelopment of private property. Although the type of development is not restricted, the location is. Downtown commercial property, industrial areas, and old and deteriorated residential areas of the city are required locations. The total outstanding private tax increment debt shall not exceed 0.7% of the estimated full value of the city.

Environmental Clean-up Tax Increment District - Districts set up in accordance with an approved Remedial Action Plan by the Minnesota Pollution Control Agency.

The sum total of all estimated taxable market value captured for tax increment purposes shall not exceed 15% of the total estimated full value of the city of St. Cloud.

All TIF proposals shall include a financial impact analysis addressing the economic relationship of the proposed project to the city's estimated tax rates, service costs, and employment opportunities.

If TIF G.O. Bonds are proposed, there shall be a review and opinion by the city's fiscal agent regarding structuring the issue and the adequacy of the tax increments to retire the debt.

An Assessment Agreement, pursuant to Minn. Statutes will be executed and presented to the City Council prior to approval of any TIF supported assistance. The agreement shall indicate whether the projected tax increment generated from the project will be sufficient to support the project expenses and all future debt obligations.

Conformity to the city's General Development Plan shall be addressed by the Planning Commission before action on the TIF Plan is taken by the council.

Miscellaneous Requirements:

Annually, in January, in conjunction with the required Annual Disclosure of Tax Increment Projects, the HRA will provide the City Council with a list of projects for which tax increment financing may be contemplated during the coming year.

To the extent possible, every effort should be made to structure the use of tax increment projects in such a manner as to:

Provide a share of the incremental growth in assessed value to affected taxing jurisdictions.

Negotiate development agreements with project owners/developers which recognize the public financial assistance and provide for recapture of same or participation in cash flows or project equity.

Minimize the use of tax increment supported General Obligation bonding by pursuing alternative measures of public assistance such as letters of credit, debt service reserves, etc.

Fiscal Review Committee. Tax-increment debt has a significant impact on tax collections for the school district, counties, and the city of St. Cloud. The city would like the input of the counties, ISD 742, and St. Cloud H.R.A. to participate in a fiscal review committee to review the short-term and long-term implications that tax increment financing will have on the various governmental entities.

Termination of District and Retirement of Debt:
The policy of the city is to retire tax increment debt whenever sufficient funds are collected. The goal of the city is to get the tax base of the tax increment district back on the general tax rolls at the earliest time possible for annual distribution to all taxing districts. The HRA will report to the City Council on an annual basis the status of all TIF districts, with emphasis on any project for which tax increments are no longer required to meet city or HRA debt or project obligations.

The city will maintain a diversified and stable revenue system to shelter it from short-term fluctuations in any 1 revenue source.

The city will implement policies to protect and better develop the future tax base. These policies will emphasize preserving the city's ability to grow and expand.

Revenues will be estimated annually using an objective and acceptable method.

The city will use a conservative, objective and analytical process in estimating its annual revenues and projecting them 5 years into the future. These projections will be revised annually, along with the annual estimates of revenue mentioned in #3 above. The city will attempt to maintain a diversified revenue base with increasing emphasis put on dependence on locally generated revenues.

The city will maintain a sound and current appraisal procedure to keep property values current.

The year to year increase of actual revenue from property taxes and property tax relief paid from state taxes will generally not exceed the growth in the tax base as a result of new construction and inflation. To ensure this, the total annual property tax levy plus local government aids and property tax relief shall not exceed 1.42% estimated full value of the city with a target of 1.37%. (In achieving the "target" previous year fluctuations under and over the target will be taken into consideration.)

The city will establish all user charges and fees at or near a level related to the direct, indirect, and overhead cost of providing the services for enterprise operations. For other activities, such as parks and recreation, user fees may be set at levels less than necessary to support the activities 100%.

The city shall charge non-residents fees, which at a minimum reflect the total cost of the activities or programs which are supported by the property tax system.

The city will annually adjust all charges and fees to reflect inflation and other cost increases.

Realizing that taxable property owners pay the overwhelming burden of city taxation, whenever possible, the city will emphasize distributing costs of running the city to all users of governmental services, including tax exempt as well as taxable property.

The city will designate a contingency fund for each major budgeted fund to cover unforeseen operating expenses and minor equipment replacement. This contingency shall be equal to at least 2% but not exceed 5% of the appropriate budget.

The city will establish capital replacement reserve accounts for each enterprise fund operation and will appropriate funds to the accounts.

Excess balances in completed project funds should be utilized either to reduce city share of new bond issues, to adequately fund reserve replacement accounts, or to retire existing debt. Excess balances shall not be used to reduce special assessments.

In accordance with the Home Rule Charter, the city shall maintain an Emergency Fund to pay for needs caused by unforeseen emergencies.

The Finance Department will make a cash-flow analysis of all funds on a regular basis. Disbursements, collection, and deposits of all funds will be scheduled to insure maximum cash availability.

When permitted by law, the city will pool cash from several different funds for investment purposes. Interest revenue will be allocated on a quarterly basis to each investing fund consistent with fund ownership.

The Finance Department will maximize investment of available funds and monitor market conditions and investment securities to determine the best rate of return on investment of city funds.

A minimum of 20% of the total investment portfolio shall be invested in certificates of deposit or other instruments through local St. Cloud banks or other financial institutions for the purpose of local investment. The city will invest with city of St. Cloud institutions that are rated outstanding or satisfactory in compliance with the Community Reinvestment Act. A participating bank should be an active originator in present Single Family Mortgage Revenue Bond programs for First-time Homebuyers, at, or in excess of, the minimum commitments set forth in the H.R.A. Origination and Sale Agreement. These city of St. Cloud institutions will be granted a 15 basis point advantage over other institutions when obtaining bids for investments.

The Finance Department will provide regular information concerning cash position and investment performance.

The city will establish and maintain a high standard of accounting practices.

The accounting system will maintain records on a basis consistent with generally accepted accounting principles as outlined by the Governmental Accounting Standards Board.

Regular monthly, quarterly, and annual financial reports will present a summary of financial activity by major types of funds.

The reporting system will provide monthly information on the total cost of goods and specific services by type of expenditure, by program, and by object code.

Annually, the Finance Department will prepare a comprehensive annual financial report. This report shall be made available to the elected officials, bond rating agencies, creditors, and citizens.

An independent public accounting firm or the Minnesota State Auditor will audit city records annually and will issue a financial opinion. Once every 5 years the audit shall be done by the Minnesota State Auditor.

The city of St. Cloud will submit its comprehensive annual financial report to the Government Finance Officers Association (GFOA) to determine its eligibility for the GFOA's Certificate of Achievement for Excellence in Financial Reporting.

The city will develop and maintain a procedural manual covering accounting practices, and internal controls for all enterprises and departments.

On an annual basis, the Finance Department shall prepare a financial trend analysis report to be presented to the City Council.

The Mission

The mission of the City of St. Cloud is to provide high quality public services for our residents in a cost effective, responsive, innovative and professional manner given the changing needs and resources available.

The following Core Values have also been established for the City of St. Cloud: